Lease-less in Seattle

By Katherine Boccaccio

Ron Johnson isn’t afraid of making waves. Just as my page-neighbor Jeff Green suggested in his latest column, “A Penney for your Thoughts,” the Apple-CEO-turned-JCP-chief is keenly focused on reinventing a department store dinosaur into a sleek, well-oiled retail machine. And if that means reneging on prior deals, so be it.

An article in this week’s Seattle Times reported that J.C. Penney has ended its plans to open a store in downtown Seattle. Former CEO Mike Ullman had committed the chain to opening a smaller urban prototype in the Kress Building at Third Avenue and Pike Street, but Johnson’s rise was the Kress Building’s fall. Even though Penney signed a lease last May for two-thirds of the building, Johnson’s suburban-trumps-urban real estate strategy means that JCP has to now shop around for a subleasee to take the space.

"This had nothing to do with Seattle or the location. The timing just did not match up with their new CEO," Seattle Pacific Realty broker Elizabeth Best told the paper; she represents J.C. Penney in its search for a sublease tenant.

"They have quite a few ideas for their suburban stores and they want to focus on that," Best said in the interview. "They're not focused on their urban concept stores anymore."

So despite that urban stores and smaller footprints are all the rage among larger-format stores such as Target, Johnson has other ideas.

J.C. Penney's lease for the 48,000-sq.-ft. store in the Kress Building is for 10 years, with options to extend it for up to 30 more. Best said she is seeking a tenant to sublease the space for 10 years.